Europe October phenol contract down €118/tonne on benzene decrease

30 September 2011 23:59[Source: ICIS news]

LONDON (ICIS)--The October European phenol contract price has decreased by €118/tonne ($159/tonne), following the same decrease in the value of the October benzene contract price, market sources confirmed on Friday.

October phenol settled on a pre-discounted basis at €1,245-1,285/tonne FD (free delivered) NWE (northwest Europe), down €118/tonne from September.

Phenol contracts in Europe are 100% linked to feedstock benzene, with the supply-and-demand dynamics of the market having little influence over the contract price.

In relation to current supply and demand in Europe, availability is stable, despite the four-week turnaround that began on 9 September at INEOS Phenol’s 680,000 tonne/year plant in Antwerp, Belgium. Demand is steady, but global financial instability is sapping consumer confidence.

“Buyers are more cautious,” a major producer said. “They are cautious not to buy more than one month in advance, and they are now just ordering truck by truck.”

Another phenol producer previously said: “People are afraid to buy in advance because they cannot commit for the whole month.” This producer added that there is a reluctance to keep any excess material in storage, explaining that “users are making sure they buy only what they are certain they will consume”.

The major uses of phenol involve its conversion to plastics or related materials. Condensation with acetone gives bisphenol-A (BPA), a key building block for polycarbonates. Condensation with formaldehyde gives phenolic resins, the most famous of which is Bakelite. Hydrogenation of phenol gives cyclohexanone, an intermediate en route to nylon.